Amazon Inc. is the leading online retailer in the US market. The company is miles ahead of its competitors, including Wal-Mart, Target, eBay, etc. Amazon advantage is its Prime program, which other online retailing companies are now planning to copy and make their own version of it.
When others think to follow the footsteps of Amazon, it takes one-step forward ahead. It is believed that the online retailer is now all set to take on Costco Wholesale, the largest brick-and-mortar store chains in the United States.
The e-commerce giant is all set to compete with Costco Wholesale, as it plans to add food in its lineup of house labels. It is believed that the company wants to grow vigorously and through Amazon Prime. It managed to achieve it to some extent.
The online retailer seeks to be the largest; hence, adding food to its house labels seems to be the best option through which it can capitalize on growing its customers’ database. Moreover, the company has taken this major step, as it noticed customers’ preference of store brands and grocery delivery services in recent times.
Wall Street Journal stated, “Amazon’s planned expansion in the private-label business mirrors a more traditional retail model where name-brand products are sold beside store-owned goods. Private labels have become a vital business for mass-market retailers, generating stronger margins and building loyalty with consumers who no longer view generic products as lower quality.”
This will not only impose threats to Costco Wholesale but it will affect the business of Wal-Mart, eBay, Target, etc., as well as they might have to think about the possibilities of adding food in its offerings. The Wall Street Journal reported that the e-commerce giant has planned that will see it expanding its private label lineup into groceries by adding food, including baby food, cereal, milk, etc.
The newspaper further reports that Amazon has already requested for a trademark protection for over two dozen categories, which lie under its already existing brands, including soup, pasta, coffee, and some household items, such as cleaning products and razor blades, etc.
It is believed that the online retailer has already tapped on the doors of private label food manufacturers for a possible partnership to continue with this project. According to people familiar with the matter, one of the private label food manufacturers includes TreeHouse Foods Inc. of Oak Brook, Illinois. It is said to be one of the largest producers that earned $3 billion in sales in 2014.
Amazon has declined to comment anything on its partnership so far.
No comments:
Post a Comment